Lower Cost Hospitals Still Deliver Value-Based Outcomes

Making health data more transparent could give momentum to an effort aiming to make hospital operations more cost-effective and driven toward improving health outcomes.

Published Online: October 29, 2013

Katie Sullivan

Making health data more transparent could give momentum to an effort aiming to make hospital operations more cost-effective and driven toward improving health outcomes. Patients often incorrectly associate high costs with better quality care, when often this is not the case.

“Just because your insurance company paid a whole lot for your hospitalization doesn't mean it was good quality for you,” said Dr Gregg Fonarow, co-director of the UCLA Preventive Cardiology Program. “The hope is, with continued reporting of outcomes metrics and the beginning of reporting of cost and charge data, we can get there.”

A recent analysis found that in 7 of 12 cities examined, the hospital with the lower average cost for inpatient and outpatient percutaneous coronary intervention (PCI) procedures also had a lower readmission rate for PCI patients. In the other 5 cities, hospitals with a higher average cost had lower readmission rates. These findings show that healthcare providers and insurers can still deliver value-based care to patients at a lower cost. As well, although the analysis focused on how lower-cost hospitals can get better angioplasty outcomes, the results can translate to other areas of healthcare.

Chapin White, a senior health researcher at the Center for Studying Health System Change, said, “The raw material is there for a good conversation about which hospitals are expensive, which hospitals are cheap, and are we getting our money’s worth from the expensive hospitals.”

Technology has also been a key player in driving transparency. Some insurers are offering price quotes or additional cost information online, while other websites are promoting star ratings of hospitals as a way to promote quality-conscious decision making.

“Quality is an important component of that, but you can’t leave cost off the table any longer,” said Dr. Patti Forest, senior medical director for quality and network performance at the North Carolina Blues. “Transparency is pushing this forward much more quickly than has happened in the past.”